The system melds the best elements of high- and low-tech, combining the immediacy of store rentals with the information and marketing of online services. Customers can see what's available and check for special offers online at Redbox. They can find locations, get maps and driving directions and, through a partnership with Yahoo, link to movie reviews. They can sign up for special offers by e-mail.

But even the digitally clueless won't have trouble finding participating stores. They'll have only to look behind the Playland posters or under the roof banners -- or in some cases the 68-foot inflatable vending machines perched above the golden arches. Think of it as a variation on the giant doughnuts and colossal hot dogs of Googie architecture.

Rentals are primarily the top 40 new releases, cost $1 a night for each (paid by credit card only) and are due by 10 p.m. the following day. If a customer keeps the disc, they are charged $1 a day until the disc is returned or 25 days have passed, when the renter becomes the owner.

Blockbuster could learn something from this late-return policy, however I am curious about what possible financial gain could result from putting $1 on your credit card to pay for them...don't the credit card companies charge ~5% of sales just to tap into their system? Shouldn't cash be encouraged? I'm not entirely sure how it works, however I do know a liquor store that has different prices for cash vs credit purchases.

At any rate, long live laptop DVD players.

-janelane

Blockbuster could learn something from this late-return policy

They did. Haven't you seen the End of Late Fees promotional material?

Membership rules apply for rentals. Rentals are due back at the date and time stated on the transaction receipt. There is no additional rental charge if a member keeps a rental item up to 7 days beyond the pre-paid rental period. After 7 days beyond the due date, Blockbuster will automatically convert the rental to a purchase on the 8th day and will charge the member the selling price for the item in effect at the time of the rental, minus the rental fee paid. Member then has 30 days to return the product and receive a credit for the selling price charged, less a $1.25 restocking fee.

however I am curious about what possible financial gain could result from putting $1 on your credit card to pay for them...don't the credit card companies charge ~5% of sales just to tap into their system? Shouldn't cash be encouraged?

It is worse than that. For most vendors, there is generally a per-transaction fee as well as some percent of sales. I have seen numbers like 0.35$ and 3%. Different merchants work out different fee structures, but I have seen numbers suggesting that credit card fees take up a good chunk of individual iTunes purchases. McDonalds probably has a very good deal -- recall that it was only very recently that the fast food vendors began accepting credit cards.

They want to use the credit card for the reasons of the late-fee charge; obviously, they have done a forecast by which the expected value of rental duration is greater than 1 day. Some reasonable number will result in purchases at $25, a significant premium over the cost of media. Membership terms tend to be the motivator by which rentals are returned. Using a credit card and this fee structure, they may lend without membership. The last thing McDonalds wants to do is extend credit to their customers; and the rental business wouldn't work if you had to give them a $25 cash deposit for every video.